Although demand for more storage capacity is a continuing problem for small- to medium-sized businesses (SMBs), only about 37 percent of companies surveyed plan to increase spending on the technology in 2007 according to a forecast released Thursday by industry research firm Gartner Inc.

Gartner asked more than 1,100 respondents globally about their 2007 budget plans for storage hardware, software or services. From 26 percent to 37 percent planned to increase spending, depending on the category, over their 2006 budgets, said Gartner analyst Pushan Rinnen.

Fifty-five percent of the IT managers surveyed said their biggest storage challenge was keeping up with growing demand, estimating that their capacity needs would grow by an average 25 percent in one year and by 41 percent in two years.

Yet, little more than a third expected budgets to increase to meet that demand. "Sometimes the budget has nothing to do with your need," Rinnen said.

However, most storage budgets at least won't shrink. The Gartner survey highlights the 70 percent who said their storage spending will "increase or remain the same" next year.

SMBs can control storage growth without adding capacity by better managing their storage networks, Rinnen said. She says fewer than 30 percent of respondents plan to implement information lifecycle management (ILM) strategies, such as tiered storage. With tiered storage, business-critical information that needs to be quickly accessible can be connected by high-quality Fibre Channel technology, while less important information can be stored on less expensive SATA (Serial Advanced Technology Attachment) drives or stored on tape.

"The vendors have not been doing a very good job of communicating that to the market," she said. "Many SMBs have failed to understand that implementing ILM and tiered storage can help solve their problems with growing capacity.”